site.btaAustrian Central Bank Governor Holzmann: Inflation Is Falling in Bulgaria, thus Potentially Improving Conditions for Euro Adoption

Inflation in Bulgaria will soon fall to a level that allows the country to successfully join the euro area, according to the latest data, Robert Holzmann, Governor of Austria's central bank and member of the Governing Council of the European Central Bank, said in an exclusive BTA interview .

He was in Bulgaria on the occasion of a public lecture held at the University of National and World Economy (UNWE) on the Monetary Policy Normalization the Euro Area - Challenges and Options, which was organised by the Economics Department at the university.

Holzmann wished this country all the best on its path to the euro, saying that he "would love to welcome Bulgaria in the euro area". According to the Austrian central bank governor, the euro area countries have the opportunity to be active members and not just observers of the processes. The global economy faces enormous challenges and Europe must be united to be able to meet them in the best way, he said.

The full text of the blitz interview with Robert Holzmann follows:

How can the European Central Bank influence weak economic growth in the euro area?

The central bank's primary objective is to achieve price stability.  If the growth rate of the euro area slows down and if the inflation rate goes down, then of course our interest rate policy would be in the direction of contributing to growth.

Austria was one of the first countries to adopt the euro as its currency. How important is membership of the euro area for Austria's economy?

I think the important part is that when you are a member of the euro area, you are not just a bystander, you are an active member. As the example of Austria shows, we are a small country, our share in the capital of the ECB is close to 3%, but if you can offer excellent studies, if you can put forward excellent arguments, then you can have your way. You are heard, you can take action, otherwise you are on the outside. When you’re in, you’re part of the team and a member of the club, which comes with benefits for the long-time members.

Bulgaria's caretaker finance minister pointed out a few days ago that at the end of November or December at the latest, Bulgaria will meet the inflation criterion needed to join the euro area? For your part, you indicated that this is possible in a meeting with the Governor of the Bulgarian National Bank. Do you believe Bulgaria is ready for euro area membership?

A: There is a process to be followed. From what we can see from the data, the inflation rate will soon be at a level that allows a successful completion of the accession. We should also bear in mind that in addition to a declining inflation rate in Bulgaria, inflation in the euro area is also declining. So the question is if your decrease is lower than our decrease then there may be deviations. I wish Bulgaria all the best as I would love to welcome Bulgaria in the euro area.

What are the challenges facing the global economy amid geopolitical tensions?

A: Huge, because we in Europe as a whole, as a continent, are closest to major geopolitical events - Ukraine, Palestine. All these events have a huge impact on our economic prospects. The more integrated Europe is, the better it will be able to meet these challenges.